Question

Suppose that we have the following demand and supply functions.QX = 100 – 0.4PXQX = 40 + 0.2PXa. What is the equilibrium market price for product X?b. What is the equilibrium quantity demanded and suppliedc. Government imposes a price floor of $120. Analyze the impact of this floor on price, quantity demand and supplied. Would this price floor create a surplus or scarcity of this product in the market?